How to Trade the AUDUSD CFD

AUDUSD

The AUD/USD currency pair is one of the world’s most widely traded currency pairs. Its popularity initially increased because of the interest rate differential between the US dollar and the Australian dollar, but now it is losing its popularity due to global economic instability. To make trading the AUDUSD currency pair easy, you can buy or sell a contract for difference (CFD) on this pair. Trading a CFD is a good way to speculate on the price differential.

The AUD/USD is affected by the Reserve Bank of Australia’s monetary policy. The central bank sets the target short-term interest rate and issues monetary policy guidance every month. A dovish statement may lead to a fall in the AUD, while a hawkish statement will increase its value.

The Australian dollar generally experiences greater volatility during the first and third hours of the day. However, this volatility is not as high between midnight and 2100 GMT. In fact, it is more active in the first half of the day between 1200 and 1700 GMT. In addition to that, the AUDUSD is a bit more volatile between 0700 and 1800 GMT. If you’re trading the AUDUSD, you’ll want to take note of when major economic reports come out.

Besides economic data, AUD/USD is influenced by various factors like the trade between Australia and Asia and the interest rate difference between Australia and the U.S. These factors make the Australian dollar attractive when compared to the U.S. Dollar. For example, a higher Australian interest rate is better for the Australian dollar than one that is lower.

The Australian dollar is Australia’s currency and is the fifth most traded currency in the world. Its geographic position, geology, and government policy have all contributed to its popularity as a currency. The country also produces a large range of valuable commodities, such as gold and copper, and trades with Asia’s largest trading partner, China.

Australia and the US have very close economic ties and are considered reliable trading and investment partners. The Australia-US Free Trade Agreement (AUFTA) was implemented in 2005 and has facilitated the growth of US exports to Australia. With the FTA, the two countries have seen direct foreign investment worth over $1 billion. Moreover, most commodities traded between the two countries are denominated in US dollars. This is important to keep in mind when trading with the AUD/USD currency pair.

AUD/USD trading is usually more active between 19:00 and 04:00 GMT. It is also heavily affected by key macroeconomic data released by both Australia and China. There are many tools available on the Internet that can help you analyze the AUD/USD market. The IG client sentiment tool provides information on retail traders’ aggregate positions. This tool can help you identify trends and trade accordingly. Alternatively, you can use a simple Moving Average (SMA) line to analyze the current price of the AUD/USD currency pair.

Australia is a major exporter of commodities, so the global prices of these commodities will affect the value of the Australian dollar. If the price of gold and oil drops, it will affect the AUD/USD currency pair. Also, the ABS (Australian Bureau of Statistics) releases key economic and social data every month. These data can trigger major price movements in the AUD/USD currency pair.

Another important aspect of AUD/USD trading is its close relationship with other currencies. The Australian dollar is a risk-linked currency, and therefore very sensitive to general market sentiment. It tends to move upward during good economic conditions and decline during market headwinds. Other currency pairs that may affect AUD/USD include USD/JPY, EUR/GBP, USD/JPY, and EUR/JPY.

One of the most important indicators of an economy’s health is the Gross Domestic Product (GDP). GDP measures the market value of all final goods and services produced in a country. This metric indicates how rapidly an economy is growing. A high GDP reading is generally positive for the AUD, while a low GDP reading is considered to be negative. Another important indicator is the PPI (production price index) and CPI (core price index). These indicators are used to track changes in purchasing trends.

The AUDUSD currency pair is widely traded in the forex market. Its volatility is encouraging for traders, and it is among the four most traded currency pairs in the forex market. The AUD/USD currency pair is closely tied to commodity prices and market risk sentiment.